Prices are at their peak. The other phases that are expansion, peak, trough and recovery are intermediary phases.As shown in Figure-2, the steady growth line represents the growth of economy when there are no business cycles. In the expansion phase, there is an increase in various economic factors, such as production, employment, output, wages, profits, demand and supply of products, and sales.In addition, in the expansion phase, the prices of factor of production and output increases simultaneously.

She probably isin't late. The business cycle moves about the line. a.Peak.c.Recession. Peak.b. As a result, individuals and organizations start developing a positive attitude toward the various economic factors, such as investment, employment, and production. Demand starts to pick up due to the lowest prices and, consequently, supply starts reacting, too.

These are measured in terms of the growth of the real GDP, which is inflation-adjusted.In the diagram above, the straight line in the middle is the steady growth line. In this stage, there is an increase in positive economic indicators such as employment, income, output, wages, profits, demand, and supply of goods and services.

In the business cycle, what follows immediately after a peak is the Contraction phase. Peak: The growth in the expansion phase eventually slows down and reaches to its peak.

In addition, in trough phase, investors do not invest in stock markets. In other words, peak phase refers to the phase in which the increase in growth rate of business cycle achieves its maximum limit. She could have a longer cycle than the typical woman.

In this phase, depreciated capital is replaced by producers, leading to new investments in the production process.Recovery continues until the economy returns to steady growth levels. Consequently, banks face the situation of increase in their cash balances.Apart from this, the level of economic output of a country becomes low and unemployment becomes high. A series of expansion and contraction in economic activityLearn 100% online from anywhere in the world.

Recession.d. Consequently, producers avoid any type of further investment in factor of production, such as labor, machinery, and furniture. As a result, the demand for products, such as jewellery, homes, automobiles, refrigerators and other durables, starts falling.As discussed earlier, in peak phase, there is a gradual decrease in the demand of various products due to increase in the prices of input. This also leads consumers to restructure their monthly budget. Once the economy touches the lowest level, it happens to be the end of negativism and beginning of positivism.This leads to reversal of the process of business cycle. In this phase, there is a turnaround from the trough and the economy starts recovering from the negative growth rate.

In peak phase, the economic factors, such as production, profit, sales, and employment, are higher, but do not increase further. In trough phase, many weak organizations leave industries or rather dissolve. The demand for goods and services starts declining rapidly and steadily in this phase. This leads to the reduction in the prices of factor, which results in the decline of demand of inputs as well as output.During the trough phase, the economic activities of a country decline below the normal level. d.expansion and contraction of economic activity are equal. The period marked from trough to peak. In a typical business cycle what stage immediately follows a peak? As a result, the rate of interest decreases; therefore, banks do not prefer to lend money. The business cycle consists of the four following phases: expansion, peak, contraction, and trough. It evaluates situations and outcomes of economic behavior as morally good or bad.Cyclical unemployment is a type of unemployment where labor forces are reduced as a result of business cycles or fluctuations in the economy, such as recessions (periods of economic decline).

This condition firstly experienced by few industries and slowly spread to all industries.This situation is firstly considered as a small fluctuation in the market, but as the problem exists for a longer duration, producers start noticing it.



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